According to a recent ranking, the Solano County real estate markets of Vallejo and Fairfield…
What will the San Francisco Bay Area housing market be like in the summer of 2021? Will it be a hot market with quick home sales? Will it favor sellers or buyers? In short, what should you expect when attempting to buy a home during summer 2021?
In an attempt to answer these questions, we’ve analyzed current trends within the Bay Area real estate market. This gives us some idea of what to expect during the summer months. Let’s explore.
Bay Area Housing Market Outlook for Summer 2021
Is now a good time to buy a home in the San Francisco Bay Area? This is a burning question on the minds of many would-be buyers. And it’s a hard question to answer across the board.
For those seeking a long-term investment (in addition to a place to call home), the summer of 2021 could be a good time to buy in the Bay Area real estate market. Mortgage rates are still low, but are now showing signs of a gradual upward trend. So there’s some urgency on that front.
Additionally, home prices will likely continue to climb for the foreseeable future. So if you buy sooner rather than later, you could avoid higher costs down the road while also growing your equity.
The takeaway: During the summer of 2021, the San Francisco Bay Area housing market will likely remain highly competitive. Things have been pretty competitive over the past couple of years, and that probably won’t change anytime soon.
According to a March 2021 real estate market report from the California Association of Realtors (C.A.R.), home sales across the Bay Area rose by around 16% from February 2020 to February 2021. So clearly, there is still a lot of demand from buyers in the region. This could be a driving factor during the summer months, as well.
The C.A.R. report also showed a 26% increase in the median sale price for existing single-family homes, over the past year or so. That’s for the nine-county San Francisco Bay Area region. Some counties, namely Napa and Contra Costa, saw even bigger gains during that timeframe.
To quote the C.A.R. report:
At the regional level, all major regions, except for the Central Valley, experienced a surge in sales from a year ago … the San Francisco Bay Area (16.1 percent), and Southern California (10.5 percent) regions also experienced double-digit year-over-year increases in sales from a year ago.
Which brings us up to the present, and the near future. The summer 2021 Bay Area housing market will likely bring a continuation of these trends:
- Sales activity should remain high, due to strong demand and low inventory levels.
- Home prices will probably continue to climb, due to the supply-and-demand imbalance.
Inventory is another key factor that could shape the San Francisco Bay Area real estate market in the summer of 2021. So let’s talk about that next.
Homes Could Be Hard to Find in Some Areas
Planning to buy a home in the Bay Area during summer 2021? You’ll want to give yourself plenty of time. Supply shortages continue to plague the local housing market, and they’ll probably be a factor for the foreseeable future.
According to the March 2021 C.A.R. report cited earlier, inventory levels are still dropping when measured year over year. That makes things more challenging for home buyers, while also putting upward pressure on prices. Tight inventory conditions will remain a factor for the San Francisco Bay Area housing market during the summer of 2021, and probably through the end of the year.
To quote the C.A.R. report again:
Three of the five regions, in fact, declined 55 percent or more in active listings from last year … The Far North (-46.3 percent) and the San Francisco Bay Area (-29.2 percent) had relatively smaller declines in their regional housing supply, but their inventory levels remained significantly below last year’s level.
As of March, most counties within the nine-county Bay Area had less than a two-month supply of homes for sale. Some counties, like Contra Costa and Alameda, had less than a one-month supply. In short, inventory levels remain well below what’s considered “normal” — even by Bay Area standards.
Above all else, this will be the biggest influencing factor for the summer 2021 real estate market. Low supply and strong demand will lead to quick sales, stiff competition among buyers, multiple-offer scenarios, and other hallmarks of a classic seller’s market.
Rising Prices Create Urgency Among Buyers
The prospect of rising home prices will continue to hang over the San Francisco Bay Area real estate market, during the summer of 2021.
In most cities across the region, home values have risen sharply over the past year or so. Not even a global pandemic and statewide economic closures could stop them from climbing. And with more and more people getting vaccinated, increased housing market demand could push prices even higher in the coming months.
The bottom line for home buyers is this: In summer 2021, the Bay Area real estate scene could be highly competitive as it has been for months. Now more than ever, it’s important to do your research and come in with a strong offer. That’s the key to success in a hot market.